September27,2018

NEW YORK (AP) - Stocks are moving broadly higher in midday trading on Wall Street as several big technology companies including Apple post solid gains. Health care companies are also doing well.

Bed Bath & Beyond plunged after reporting earnings that fell far short of analysts' estimates and slashing its outlook for the year. Packaged food company Conagra fell after reporting weak results of its own.

WASHINGTON (AP) - Long-term U.S. mortgage rates are up for the fifth straight week, with the key 30-year rate reaching its highest level in more than seven years.

Costs for would-be homebuyers continue to climb. Mortgage buyer Freddie Mac said Thursday that the average rate on 30-year, fixed-rate mortgages jumped to 4.72 percent from 4.65 percent last week. The average benchmark rate has risen from 3.83 percent a year ago.

The average rate on 15-year, fixed-rate loans increased to 4.16 percent this week from 4.11 percent last week.

The Federal Reserve signaled its confidence in the economy on Wednesday by raising a key interest rate for a third time this year, forecasting another rate hike before year's end.

PENDING HOME SALES

US pending home sales fell in August

WASHINGTON (AP) - Pending home sales slipped in August as fewer Americans signed contracts to purchase a house, the fourth decline in the past five months.

The National Association of Realtors says that its pending home sales index fell 1.8 percent last month to 104.2. This measure of contract signings has tumbled 2.3 percent in the past year, with the sharpest annual decline of 11.2 percent in the West where homes generally cost more.

The recent setbacks suggest that the combination of rising prices, higher mortgage rates and a limited number of sales listings are hurting affordability.

In August contract signings slipped on a monthly basis in the four major geographic regions: Northeast, Midwest, South and West.

Pending sales are a barometer of home purchases that are completed a month or two later.

DURABLE GOODS

Orders for US durable goods jumped 4.5 percent last month

WASHINGTON (AP) - Orders for long-lasting U.S. factory goods rose at a healthy pace last month, though the increase was mostly driven by a surge in aircraft demand.

The Commerce Department says orders increased 4.5 percent in August, the most in six months. Excluding aircraft, cars, and other transportation equipment, however, orders increased just 0.1 percent.

U.S. manufacturing is expanding at a solid pace, with orders up 9.2 percent year-to-date. Consumers are confident and spending more, and businesses have stepped up investment in machinery and equipment. Still, President Trump's trade battles with China, Europe, and Canada pose a risk in the coming months.

A category of orders that is a proxy for business investment fell 0.5 percent last month, but that follows two strong months and those orders are up 7.4 percent year-to-date.

BED BATH & BEYOND-STOCK

Bed Bath & Beyond nosedives after cutting forecasts

NEW YORK (AP) - Bed Bath & Beyond's stock plunged to its lowest price in 18 years after the home goods store chain posted weak results in the second quarter and cut its forecasts for the rest of the year.

The company's profit fell by almost 50 percent compared to a year ago. Its stock sank 21.5 percent to $14.76 in very heavy trading. It's down about 33 percent in 2018.

Bed Bath & Beyond, which traded above $75 in early 2015, fell to its lowest level since early 2000.

KeyBanc analyst Bradley Thomas said competition for Bed Bath & Beyond from both online and physical retailers is getting worse. He said that competition, along with continued spending on its website and mobile business, will continue to hurt the company's profits.

AETNA-BUSINESS SALE

Aetna sells Medicare business as it eyes close of CVS deal

UNDATED (AP) - Aetna is selling its Medicare prescription drug business, potentially clearing the way for CVS Health to complete its $69 billion takeover of the insurer.

CVS announced plans to buy Aetna late last year. The deal is expected to give the drugstore chain a bigger role in health care, with the companies combining to manage care through CVS stores, clinics and prescription drugs.

Industry experts say regulators may have been concerned about a Medicare business overlap between the companies. But Leerink analyst David Larsen says he is more confident the deal will be approved due to the sale that Aetna announced Thursday.

Aetna is not disclosing terms of its deal with fellow insurer WellCare.

Aetna Inc. and CVS Health Corp. expect their combination to close before the end of this year.

RITE AID-BOARD SHAKE-UP

A board reshuffle at Rite aid after 2 failed merger attempts

UNDATED (AP) - After two failed buyouts, Rite Aid is shuffling its board of directors and dividing power at the top of the drugstore chain.

Rite Aid said Thursday that three new, independent directors will be nominated to its board and that CEO John Standley will no longer hold the title of chairman. That goes to current board member Bruce Bodaken.

Shareholders will vote next month on whether to approve new board nominees Robert Knowling Jr., Louis Miramontes and Arun Nayar.

Bodaken said in a prepared statement that a push for a board reorganization was accelerated after hearing from shareholders following the collapse last month of an attempted buyout by Albertsons. Rival Walgreens also failed in a separate attempt to acquire Rite Aid Corp., which is based in Camp Hill, Pennsylvania.

HEALTH OVERHAUL

Trump health chief: Premiums to drop for popular ACA plan

WASHINGTON (AP) - U.S. health secretary Alex Azar says premiums for a popular type of health plan under the Affordable Care Act will edge downward next year.

Speaking in Nashville on Thursday, Azar said premiums for a popular type of "silver" plan will drop by 2 percent in the 39 states served by the federal HealthCare.gov website. The number of marketplace insurers will grow for the first time since 2015.

The analysis by the consulting firm Avalere Health and The Associated Press found that average premiums across all plans under the Obama health law will rise 3.3 percent.

The Trump administration is taking credit for market stability, but experts say premiums would be even lower but for administration attempts to undermine "Obamacare."

SPORTS GAMBLING

Republicans favor new federal regulation on sports gambling

WASHINGTON (AP) - House Republicans say they strongly favor new federal regulations on sports gambling after the Supreme Court allowed states to open sports books.

Thursday's hearing of a House Judiciary subcommittee was the first Congress has held on the issue since the Supreme Court decision in June to strike down a law that limited sports gambling to four states. Since then, sports books have opened in Delaware, New Jersey, Mississippi and West Virginia, with more states considering legalization.

Republicans expressed concerns about advertisements and online gambling platforms targeting minors, as well as the potential for match-fixing.

GOP Congressman Jim Sensenbrenner of Wisconsin says "for Congress to do nothing is the worst possible alternative" and that with no federal action, "there are going to be people who get hurt and get hurt badly."

WTO-TRADE FORECAST

WTO cuts trade growth forecast to 3.9 percent for 2018

GENEVA (AP) - The World Trade Organization has lowered its global trade growth forecast for this year by one-half percentage point to a still-robust 3.9 percent, saying increased trade tensions between large economies and heightened uncertainty contributed to the downgrade.

For next year, the Geneva-based trade body predicts a further slowing of growth in volume terms, to 3.7 percent.

WTO Director General Roberto Azevedo said Thursday: "While trade growth remains strong, this downgrade reflects the heightened tensions that we are seeing between major trading partners."

The WTO cited new trade measures targeting exports from "large economies," a clear allusion to U.S. tensions with some key trading partners.

CHINA-US-INTERFERENCE

China urges US to stop slander after Trump's meddling claim

BEIJING (AP) - Beijing has urged the United States to stop slandering China after President Donald Trump accused the Asian giant of trying to interfere in the upcoming American congressional elections.

Geng Shuang, a foreign ministry spokesman, said Thursday that the Chinese government does not interfere in other countries' internal affairs.

Trump said China was interfering in the elections because it opposes his tough trade policies. The White House provided scant evidence of anything akin to the level of Russia's meddling in the 2016 presidential election.

Geng said Beijing "urges the U.S. to stop making unwarranted accusations and slanders against China and stop the words and deeds that harm bilateral ties and the fundamental interest of the two peoples."

Trump later said there was "plenty" of evidence but didn't provide details.

The chairman of the EU Parliament's civil liberties and justice committee, Claude Moraes, said Thursday that the audits "need to be done."

The parliament summoned Facebook CEO Mark Zuckerberg in May to testify about allegations that political consulting firm Cambridge Analytica used the data of millions of Facebook users to target voters during political campaigns.

The audit demands a part of a resolution that Moraes has drafted in response to the scandal. The committee aims to pass the resolution by Oct. 10 and put it to the full assembly in late October.

GREECE-ECONOMY

After 3 years, Greece ends limits on bank cash withdrawals

ATHENS, Greece (AP) - Greek authorities say they will soon lift restrictions on domestic cash withdrawals imposed more than three years ago to prevent a bank run by depositors at the height of the country's debt crisis.

The finance ministry said Thursday that from Oct. 1 depositors will face no limits on withdrawals from bank accounts in Greece.

Greeks abroad will be able to withdraw up to 5,000 euros ($5,800) a month. Furthermore, the limit on carrying cash abroad will be increased from 3,000 euros to 10,000.

The restrictions were imposed in June 2015, to prevent banks from collapse as depositors tried to empty their accounts after talks between the government and bailout creditors appeared on the verge of collapse.

The moves come a month after the country formally ended its latest bailout program.

News outlets report 74-year-old James Casey of Poquoson, who owns Casey's Seafood in Newport News, entered the plea Wednesday in federal court. He faces up to five years in prison at sentencing Jan. 9.

Prosecutors say the company mixed discount "distressed" crabmeat from Indonesia, Brazil and elsewhere with Chesapeake blue crab, labeling it a "Product of the USA." Some of the crabmeat sold as Chesapeake blue crab contained only foreign meat.

Court documents state Casey's Seafood sold about 360,000 pounds of falsely labeled crabmeat from 2012 to 2015, worth $4.3 million at wholesale prices in Virginia, Maryland, Washington, D.C., Delaware, North Carolina, South Carolina, Tennessee and Florida.

THE OKLAHOMAN-SOLD

The Oklahoman has been sold to GateHouse Media

OKLAHOMA CITY (AP) - The Oklahoman is being sold to GateHouse Media.

Publisher Chris Reen announced the sale to staff Thursday. Terms have not been disclosed. The sale is expected to close Monday.

Reen says some layoffs would happen Thursday to help stabilize financial operations for Oklahoma City's only daily newspaper. Reen says he will be leaving his position as publisher.

September27,2018

Sports betting was the topic of discussion at today’s hearing in the House of Representatives’ Judiciary Subcommittee on Crime, Terrorism, Homeland Security, and Investigations, and gaming industry experts testified that an overly regulated market will only allow underground and offshore illegal sportsbooks to thrive.

Critics to the liberalization of sports betting following the Supreme Court’s May decision to strike down the federal ban issued threats on the dangers of expanded gambling and mobile betting. NFL spokeswoman Jocelyn Moore expressed concerns that widespread legal sports gambling jeopardizes the integrity of sports.

“AGA does not believe an additional layer of federal regulatory oversight is needed,” Slane declared. “Just as Congress has refrained from regulating lotteries, slot machines, table games, and other gambling products, it should leave sports betting oversight to the states and tribes that are closest to the market.”

Feds Step Aside

The hearing was a result of Senators Orrin Hatch (R-Utah) and Chuck Schumer (D-New York) saying a federal framework should be created to form a unified regulatory environment. Schumer believes it’s imperative for “the federal government to take a leadership role and provide the necessary guidance to prevent uncertainty and confusion for the leagues, state governments, and fans alike.”

Harris said protecting the integrity of sports is of utmost concern, and that’s why regulated books are in everyone’s best interest.

"“Sports betting scandals are more likely to occur in illegal markets where there is no regulatory responsibility, where monitoring betting patterns is of no concern, and were line movements may not matter,” Nevada’s chief gaming regulator testified"

Harris added that states would be wise to consider Nevada’s sports betting regulations, which can “help guide other jurisdictions through this historical time.” She concluded that state gambling regulators are more than equipped to oversee sports betting without additional federal governance.

Bettors Want Better Odds

Subcommittee Chair Jim Sensenbrenner (D-Wisconsin) asked the panel, “If I were running around with a fistful of money that I wanted to bet, where would I go when the illegal sportsbook is offering all of these other goodies that a legal sportsbook cannot?”

Slane responded, “You hit the nail on the head. Sports betting is a low margin business, so in order for us to compete with the illegal market there has to be the policies in place that allow us to offer competitive odds and drive traffic to our legal sites.”

"Slane added that 70 percent of bettors who currently access illegal sportsbooks say they would gamble on legal sites if the odds were the same. The AGA rep finished by stating overburdensome tax rates and an unneeded federal regulatory layer will prevent sportsbook from offering odds that compete with those found on illegal books."

At the end of the hearing, Rep. Sensenbrenner strangely concluded, “I think all of you can agree, is that for Congress to do nothing is the worst possible alternative. So, we have some work to do.”

September26,2018

WASHINGTON (Reuters) - A U.S. House of Representatives subcommittee will weigh sports betting at a hearing next week following a Supreme Court ruling on the issue earlier this year, the congressional panel said in a statement released on Wednesday.

The Sept. 27 hearing by the House Judiciary Committee’s crime subcommittee will include representatives from the National Football League, the gaming industry, consumer advocates and a state gaming control board, the statement said.

September26,2018

Lawmakers will converge on Capitol Hill Thursday to discuss sports betting for the first time following the repeal of the federal ban.

The House Subcommittee on Crime, Terrorism, Homeland Security, and Investigations is comprised of 16 members. Most noteworthy, the House will hear testimony from industry stakeholders. Therefore, these include the National Football League (NFL), which continues to lobby Congress for a federal framework.

The hearing is titled “Post-PASPA: An Examination of Sports Betting in America.” It’s scheduled to begin at 10 a.m. Eastern time.

LIST OF INDIVIDUALS PROVIDING TESTIMONY

The committee will hear testimony from five witnesses which include:

Les Bernal: National Director, Stop Predatory Gambling

Sara Slane: Senior Vice President of Public Affairs, American Gaming Association

Jocelyn Moore: Executive Vice President of Communications and Public Affairs, National Football League

POTENTIAL TALKING POINTS

Due to various sports betting issues, much of the discussion will revolve around tackling them. Certainly these include integrity fees, official data suppliers,illegal black market and a federal framework.

All of these issues have been discussed by a number of states looking to pass sports betting bills. Most noteworthy, this follows the Supreme Court repeal of the Professional and Amateur Sports Protection Act of 1992.

From the AGA’s perspective, the hearing will provide a platform. Industry stakeholders can educate lawmakers on the current gaming landscape, post-PASPA.

“It’s really an opportunity for us to talk about how highly regulated we are in the industry and our commitment to ensuring all illegal activity becomes legal,” Slane said in an interview Wednesday.

Many expect Harris to shelter the load of questioning. Above all, she is the chairman of the NGCB. Nevada has years of experience in regards to regulated sports betting.

Expect strong opposition from Bruning, Bernal and the NFL to push heavily for more federal oversight.

In written testimony submitted Wednesday, Moore urged Congress to act “immediately.” He said to create a “new statutory and regulatory standards for legalized sports betting.”

“The absence of a clear and enforceable set of legal standards for sports betting threatens the integrity of our nation’s professional and amateur sports contest – something Congress has sought to protect for more than 50 years,” wrote Moore in her seven pages of written testimony.

NEXT FOR SPORTS BETTING AT THE FEDERAL LEVEL

A spokesman for committee chairman Jim Sensenbrenner, a Republican, said the hearing has an ultimate goal. This is to determine if Congress needs to intervene.

“Sensenbrenner is very open-minded on this issue and is interested in what all parties have to say. There will only be next steps if the committee determines Congress has a role to play,” he said.

A number of states are looking to introduce sports betting bills beginning in 2019. Seems like the hearing could potentially sway them. This includes Washington, D.C., which recently saw its own version of a sports betting bill released earlier this week.

Illinois, Indiana, Kansas, Kentucky and Ohio have all shown extensive interest in sports betting. Therefore these states plan on introducing legislation at the start of their respective legislative sessions.

Throughout his career, Congressman Sensenbrenner has taken the lead on initiatives to protect children. He was instrumental in passing the 2003 PROTECT Act, which enhanced the AMBER Alert system, strengthened penalties against kidnappers, and aids law enforcement in protecting children. And in 2006, The Adam Walsh Child Protection and Safety Act expanded coverage of the national sex offender registry, mandates the collection of DNA from sex offenders, and forces states to comply with requirements to keep information on the sex offender database current.Rep. Sensenbrenner: “The sexual abuse of children is a despicable crime, and Congress must protect those most innocent and vulnerable among us. This bipartisan legislation, which contains a reauthorization of my Adam Walsh Act, is an important step to preventing sexual exploitation of our nation’s children.”Background on the Adam Walsh Reauthorization Act

Originally passed in 2006, the Adam Walsh Child Protection and Safety Act has played a vital role in the prevention of sexual exploitation of America’s children. The comprehensive, bipartisan law strengthened sex offender registry requirements and enforcement across the country, extended registry requirements to Native American tribes, increased penalties for child predators, and authorized funding for various programs to strengthen our defenses against child exploitation.

Language included in H.R. 6847 reauthorizes the two primary programs of the Adam Walsh Act— The Sex Offender Registration and Notification Act (SORNA) and The Sex Offender Management Assistance Program (SOMA). SORNA sets minimum guidelines for state sex offender registries and establishes the Dru Sjodin National Sex Offender Public Website, which is a comprehensive national system for the registration and notification to the public of sex offenders. SOMA provides funding to the states, tribes, and other jurisdictions to offset the costs of implementing and enhancing SORNA, and funding for the U.S. Marshals Service and other law enforcement agencies to assist jurisdictions in locating and apprehending sex offenders who violate registration requirements.

September26,2018

As key stakeholders prepare for a sports betting hearing this week in Washington D.C., it is safe to say that the hearing will garner less attention than a more publicized one Thursday morning on Capitol Hill.

At 10 a.m. ET on Thursday, the U.S. House Subcommittee on Crime, Terrorism, Homeland Security and Investigations will convene for a highly anticipated hearing on the state of the legalized sports gambling market. The hearing inside the Rayburn House Office Building will take place less than a mile from testimony in Brett Kavanaugh's Supreme Court confirmation hearing, scheduled to begin at the same hour inside the Dirksen Senate Office Building. While a media firestorm is expected throughout the day outside the chambers, sports betting experts will be more focused on a bevy of key gaming issues that could arise down the street on Independence Avenue.

The hearing, entitled Post-PASPA: An Examination of Sports Betting in America, will be the first by Congress since the Supreme Court rocked the gambling world with a historic ruling in May. In a 6-3 vote, the Court struck down a quarter-century federal ban on sports gambling in the U.S. Ever since, a debate has intensified on whether the activity should be strictly regulated by the federal government or if the responsibility should be left to the states. Already, four states -- New Jersey, Delaware, Mississippi and West Virginia -- have legalized sports gambling over the last three months.

Five witnesses are scheduled to testify at the hearing including the Nevada Gaming Control Board Chair Becky Harris, NFL Executive Vice President of Communications and Public Affairs Jocelyn Moore and American Gaming Association Senior Vice President of Public Affairs Sara Slane. The hearing will be chaired by Rep. James Sensenbrenner, a Wisconsin Republican. The chairman is looking forward to hearing a cross-section of opinions from a wide array of witnesses on whether sports betting should be heavily regulated, a Sensenbrenner spokesperson said.

Here are some key issues to monitor during Thursday's hearing:

What is the likelihood that Congress will eventually impose a federal framework for the legal sports betting market in the U.S.?

This is the million dollar question that carries widespread ramifications over the next several years, as legalized sports betting proliferates around the country. Last month, Senate Minority Leader Chuck Schumer outlined a policy proposal aimed at creating robust consumer protections for gamblers and ensuring integrity in professional sports. A comprehensive federal framework that oversees the legal market will likely be embraced by commissioners in the Big 4 sports leagues, including NFL commissioner Roger Goodell. Shortly after the Court's decision, Goodell urged Congress to enact uniform standards for sports gambling, echoing the position of his counterparts in the other leagues.

Such a framework has been met with resistance from the American Gaming Association, a leading trade group for the gambling industry. The group, which supports 1.8 million jobs nationwide, instead favors policies that empower state and tribal regulations. Current regulations for other forms of gaming already address age restrictions, record keeping requirements, licensing and suitability determinations, Slane wrote in a Sept. 13 letter to Schumer's office. In addition, U.S. casinos are subjected to strict anti-money laundering protocols from state regulators in order to combat structuring attempts from organized crime networks, an activity that could prosper as the legal sports gambling market expands. Both Slane and Harris may inform committee members on a rigorous model in Nevada, where regulators continually strive to protect the safety of the market.

Mandates for gaming operators on the use of a professional sports league's official data

Over the summer, the NBA announced a historic partnership with MGM Resorts International that designated the company as the official gaming partner of the league. The deal provides MGM with access to the league's official data on a non-exclusive basis. In some respects, the access to the league's real-time data feed could give MGM a competitive advantage over competitors, namely with in-game wagering when speed is at a premium.

Schumer's proposal requires the use of official league data in determining betting outcomes, a provision that has been opposed by the AGA. As intellectual property creators of the data, the NBA believes it should receive proper compensation. The AGA, on the other hand, argues that there is "neither a need, nor a legal precedent" to mandate gaming operators to purchase data from the leagues. "Mandating every sportsbook contract with only one official data company will allow individual, preferred data providers to set inflated, non-competitive monopoly prices for their services," Slane wrote in the letter. Two states, New York and Missouri, have pending bills with language regarding the use of professional sports league data in determining sports wagering outcomes.

Societal effects of gambling addiction on Millennials and the nation as a whole

Schumer and Sen. Orrin Hatch, a co-author of the Professional and Amateur Sports Protection Act of 1992, have taken steps to address the epidemic of problem gambling across the nation. For its part, the AGA sides with Schumer in advocating for vigorous safeguards to adequately protect consumers.

John Warren Kindt, a professor at the University of Illinois, received inclusion on the committee's preliminary list but was omitted from a revised one on Wednesday. Kindt, who has written extensively on problem gambling issues, described sports gambling as a "gateway drug," to gambling addiction in a 2012 U.S. News & World Reports column. By legalizing sports betting, states can expose themselves to additional taxpayer costs for crime and the creation of new financial products that could lead to a potential "speculative bubble," he indicated at the time. The committee is scheduled to hear from Les Bernal, national director of Stop Predatory Gambling. Bernal's testimony could be watched closely by the leagues.

Curbing the influence of the Black Market

According to various estimates, Americans wager upwards of $100 billion annually on sports. The actual amount is difficult to ascertain given the complexity of monitoring betting patterns on the illegal, offshore market. Some gaming experts argue that high state tax regimes will simply push bettors away from regulated sports books back to the black market. The illegal market lacks consumer protections and threatens the integrity of sports, Rep. Dina Titus, a Nevada Democrat, wrote in a Sept. 25 letter to Sensenbrenner. Titus also took exception to a so-called integrity fee that some leagues have proposed in recent months. "Calls for integrity fees paid to leagues would chip away at state revenues and already slim margins for legal sportsbooks, hurting their ability to compete with offshore books and move more consumers to the regulated market," she wrote. The committee could also address implications of the Wire Act in the Post-PASPA era on the unregulated black market.

Response to palpable errors from pricing systems used by gaming operators to set odds

In an abrupt U-turn last week, FanDuel Sportsbook agreed to pay a small number of bettors who received erroneous odds of 750-1 on the Denver Broncos to defeat the Oakland Raiders on Sept. 16. For a period of 18 seconds, the book listed incorrect odds on the Broncos to win the game outright due to a pricing error. FanDuel initially declined to honor a $110 ticket that would have paid approximately $82,000, before changing its stance days later. Though palpable errors are well-documented in Europe, the incident represented the first time a legal book in New Jersey experienced a major gaffe since the state legalized sports betting. Legislators could be interested in the types of internal controls that books need to maintain to limit the occurrences.

September26,2018

The three states that have recently opened their doors to legalized sports betting have already collected slightly more than $3 million in tax revenue.

Delaware continues to see a steady flow, while Mississippi and West Virginia are grappling with their first revenue figures since offering the activity. Policy specialists expect revenue totals to grow as the National Football League season continues.

“Gambling and football are intertwined like no other sport. Even non-gamblers know the point spread for their games. All the pregame shows do [game] picks with Vegas lines,” Richard Auxier, a research associate at the Urban-Brookings Tax Policy Center, told Bloomberg Tax.

Amid all the state-side activity, federal lawmakers have scheduled a Sept. 27 hearing on sports betting.

Tax Revenue Totals

Delaware was the first state to take bets, opening its doors to the activity on June 5. From June 5 through July 29, the state took in nearly $23 million in wagers, according to its lottery record. Delaware’s law allows the state to keep 50 percent of the proceeds from the activity, which means about $2.04 million for the state after winning bets were paid.

Mississippi began offering bets Aug. 1, and through Sept. 3 the Magnolia State had issued $9.8 million in wagers. Mississippi has a 12 percent tax on sports betting, which equates to $1.2 million in state revenue through the five weeks.

West Virginia opened its door to legal betting on Aug. 30, and has released totals through only the first week of legalized betting. From Aug. 30 through Sept. 2, West Virginia took in $320,631 in wagers; taxing those bets at 10 percent, the state yielded $32,063 in revenue.

The U.S. Supreme Court cleared the way for states to allow bets on sports in its May ruling in Murphy v. NCAA, which repealed the federal Professional and Amateur Sports Protection Act of 1992 (PASPA). That law had prohibited states from “authorizing” gambling related to professional and amateur sports leagues.

NFL Season Will Boost Revenue

The NFL’s influence is visible in Mississippi’s sports betting totals. Of the state’s $9.8 million wagered from Aug. 1 through Sept. 3, $3.5 million was wagered in just the first three days of September, during the NFL’s last week of preseason games. The $3.5 million wagered in three days is nearly half of all bets placed during August.

“Betting revenue will obviously increase during the NFL season, and more states will legalize it, but they must realize that this is a low-margins business and should not be looked at as a way to fill budget holes,” Sara Slane, senior vice president of public affairs at the American Gaming Association, has told Bloomberg Tax.

In 2018, 19 states proposed legislation to legalize sports betting, and Slane said she expects at least the same number to push for the activity during the upcoming session.

A Short-Term Trend?

Auxier said states should be worried about competition.

“For example, Delaware and West Virginia would probably see a dip in revenue if the District of Columbia legalizes sports betting. And when we get to the point where sports gambling is near-universal, you might also see tax rates come down a little—further reducing revenue,” Auxier said. “Sports gambling is all about trends, right? This is a positive trend. But it’s a short-term one.”

District of Columbia council member Jack Evans (D) introduced a bill Sept. 18 that would allow bets and levy a 10 percent tax on gross revenue from wagers.

In gauging a state’s potential revenue numbers, Auxier pointed Bloomberg Tax to Nevada’s 2017 sports betting revenue, which was nearly $250 million. However, Nevada’s 6.75 tax rate means the state only saw about $17 million in tax revenue from the activity.

Auxier said that $17 million only equates to 0.01 percent of Nevada’s total state general revenue. He predicted that sports betting revenue won’t surpass 1 percent of total state tax revenue in any jurisdiction that legalizes it.

Federal Spotlight on Sports Betting

Sports betting has been an area of focus for federal lawmakers in the months following the high court’s reversal of PASPA.

The House Judiciary Subcommittee on Crime, Terrorism, Homeland Security, and Investigations is set to host a Sept. 27 hearing titled “Post-PASPA: An Examination of Sports Betting in America.” It remains unclear what lawmakers will focus on during the hearing, as there hasn’t yet been a federal proposal introduced in either chamber of Congress.

Slane will be among those testifying before the subcommittee. She will be joined by:

Jocelyn Moore, executive vice president of communications and public affairs at the NFL;

Becky Harris, chair of the Nevada Gaming Control Board;

Jon Bruning, counselor at the Coalition to Stop Internet Gambling (CSIG); and

John Warren Kindt, professor at the University of Illinois.

A spokesperson for Rep. Jim Sensenbrenner (R-Wis.), who chairs the subcommittee, told Bloomberg Tax Sept. 24 that the chairman “looks forward to hearing from these witnesses who represent a wide variety of positions on sports betting.”

Schumer also published a memo that included three principles he deems necessary in a framework: protecting young people and those suffering from gambling addiction, protecting the integrity of the game, and protecting consumers and individuals placing bets.

During an Aug. 24 update on the Senate floor, Sen. Orrin G. Hatch (R-Utah) said progress is being made, and that he would release a legislative proposal “in the coming weeks.” There is currently a 0.25 percent federal excise tax on all betting handles.

September26,2018

A diverse line-up of witnesses is now scheduled for Thursday’s federal hearing on sports wagering in Washington, D.C.

The House Judiciary Subcommittee on Crime, Terrorism, Homeland Security, and Investigations hearing is called “Post-PASPA: An Examination of Sports Betting in America.” The subcommittee is charged with reviewing testimony on the national consequences of the legalization of sports wagering.

The scheduled witnesses are:

• Jocelyn Moore, executive vice president of communications and public affairs at the NFL;

• Sara Slane, senior vice president of public affairs at the American Gaming Association;

A spokesperson for Rep. Jim Sensenbrenner (R-Wis.), who chairs the subcommittee, told Bloomberg Monday the chairman “looks forward to hearing from these witnesses who represent a wide variety of positions on sports betting.”

September26,2018

The hearing entitled “Post-PASPA: An Examination of Sports Betting in America” will take place in the HouseSubcommittee on Crime, Terrorism, Homeland Security, and Investigation, a subcommittee of the House Judiciary Committee.

Let’s take a closer look at what to expect when legislators gather to discuss the country’s sports betting industry …

When and where will the hearing be?

The hearing starts at 10 a.m. EDT Thursday. It will take place at the Rayburn Building on Capitol Hill in Washington, D.C.

You can watch a live stream of the hearing here. Legal Sports Report will have ongoing coverage Thursday throughout the hearing.

Why is Congress looking at sports betting?

Sports betting was settled law in the United States for 26 years before May. That’s when the Supreme Court ruled PASPA unconstitutional via the Murphy v. NCAA case.

Pro sports leagues and the NCAA supported PASPA’s long-standing blanket ban on single-game sports betting outside Nevada. They fought for years against New Jersey in the Murphy case and remain unhappy about the loss of PASPA.

State-level lobbying efforts have not yielded much of what the leagues now want: a cut of the profits from legal sports betting. They also prefer not to fight for that cut in every state, so they are lobbying Congress for a new federal solution.

The leagues found an ally in Sen. Chuck Schumer (D-NY), the Senate Minority Leader. Schumer earlier this month proposed new federal sports betting guidelines that Congress could enact or states could follow. Unsurprisingly, the terms heavily favor the leagues, which are headquartered in New York.

Sen. Orrin Hatch (R-UT), a co-author of PASPA, also wants a new federal law. Hatch reaffirmed his position as the Senate’s anti-sports betting spokesperson quickly after the Supreme Court decision.

Is there a sports betting bill?

In short, no. That does not guarantee we are free and clear from one appearing, though.

Hatch twice promised to introduce a new federal law after the repeal of PASPA. He has not yet dropped that bill.

Schumer’s proposed framework is not a bill and does not look ready-made to become one. He also left open the possibility that his preferred guidelines are used by states crafting their own laws.

Rep. Frank Pallone (D-NJ) recently withdrew the GAME Act bill he proposed in the House. Pallone introduced the legislation on the day the Supreme Court heard arguments on PASPA. Its utility largely expired once state-level sports betting bills became legal.

The legislation from Pallone, a longtime supporter of sports betting in New Jersey, appeared more friendly to states and casinos than what can be expected from Hatch or Schumer.

Who is testifying in the hearing?

Jocelyn Moore, executive vice president, communications and public affairs, National Football League

Jon Bruning, counselor, Coalition to Stop Internet Gambling (CSIG)

Les Bernal, national director, Stop Predatory Gambling

Some sources indicate John Kindt, an anti-gambling professor from the University of Illinois, also will appear.

A breakdown of what to expect from their testimony can be found here. Expect Slane and Harris to back the rights of states to craft their own legislation, while Bruning and Kindt warn of the vices of iGaming. Moore will present the NFL’s position, which favors a federal law but not integrity fees.

Who is on the committee? Are any of the states that have legalized sports betting represented on the committee?

Here are the members of the subcommittee:

James Sensenbrenner Jr. (R-WI), Chair

Louie Gohmert (R-TX), Vice Chair

Sheila Jackson Lee (D-TX), Ranking Member

Karen Bass (D-CA)

Steve Chabot (R-OH)

Val Demings (D-FL)

Trey Gowdy (R-SC)

Hakeem Jeffries (D-NY)

Mike Johnson (R-LA)

Ted Lieu (D-CA)

Ted Poe (R-TX)

Jamie Raskin (D-MD)

John Ratcliffe (R-TX)

Cedric Richmond (D-LA)

Martha Roby (R-AL)

Keith Rothfus (R-PA)

John Rutherford (R-FL)

What might jump out at you is that none of the subcommittee members hails from a state with legal sports betting. Only Rothfus represents a state with a sports betting law on the books, although Pennsylvania is not live.

Considering the potential for hyperbole in some of the testimony, the knowledge level of subcommittee members can be speculated upon. Can they weather any bluster or scare tactics to get to the substance of what is happening today in US legal sports betting?

September25,2018

Illinoisans should prepare to pay more for online purchases from out-of-state retailers.

The U.S. Supreme Court’s recent decision in South Dakota v. Wayfair Inc. is projected to increase revenue to the Illinois state budget by $140 million this year. As a result of the decision, and a change in Illinois law passed with this year’s budget bill, most out-of-state retailers who sell to Illinois customers will be required to collect and remit a “use tax” of 6.25 percent on all online transactions starting Oct. 1.

Technically, Illinoisans are already required to pay the use tax – an alternative to the sales tax paid on transactions at brick-and-mortar retailers – on online transactions. However, not many do. And under Supreme Court precedent established in 1992 in Quill Corp. v. North Dakota, only businesses with a physical presence in the state were required to collect sales taxes for online purchases.

Therefore, in practice, many online purchases from out-of-state retailers were free from state taxation. Proponents of the Wayfair decision believe that Quill created an unfair advantage for online retailers over brick-and-mortar stores.

The Illinois General Assembly changed the requirements under which companies must collect and remit the use tax in the fiscal year 2019 budget implementation bill. Anticipating the outcome of Wayfair, Illinois’ requirements now mirror those of South Dakota. All businesses with over $100,000 of online sales in Illinois, or at least 200 discrete transactions, are required to collect the tax on all purchases.

The new rules take effect Oct. 1. The Illinois Department of Revenue estimates the stricter collections requirements will generate an additional $200 million in sales tax collections annually. Because the rules are not in effect for all of fiscal year 2019 – which goes from July 1, 2018, to June 30, 2019 – the estimate for the first year of collections is $140 million.

However, some uncertainty around this new tax remains.

A bill introduced in the U.S Congress by Wisconsin Republican Jim Sensenbrenner would delay implementation until Jan. 1, 2019, and would also restrict the businesses subject to collection requirements to those that generate more than $10 million in annual U.S. e-commerce sales. Both changes would likely reduce the amount of revenue Illinois could raise this year.

New federal restrictions on states’ collection of online sales taxes would put another hole in Illinois’ fiscal year 2019 budget, which is already as much as $1.5 billion out of balance due to its reliance on budget gimmicks and structural overspending.

Sensenbrenner’s bill, which is co-sponsored by two Democrats, according to Reuters, also calls on states to create interstate agreements that simplify sales tax collections for out-of-state online retailers.

South Dakota’s participation in the Streamlined Sales and Use Tax Agreement, or SSUTA, was cited as a positive factor by the Supreme Court in Wayfair. The SSUTA, which currently has 23 full member states, simplifies online sales tax collections by creating uniform rules and processes for compliance. Illinois is not a member.

While the exact timing and scope of the change remains somewhat uncertain, one thing is clear: Illinoisans will soon be paying taxes on more online purchases. Unfortunately, the Illinois General Assembly has already planned to spend this money rather than using it to pay down debt or repeal other harmful taxes.